Stick-built and modular homes both provide buyers with a pathway to achieving the American dream of homeownership. Here’s what you need to know about financing each type of home.
What is a Stick Built Home?
A stick-built home is any home constructed from start to finish at the home’s site. Custom homes are all stick-built, as they are built from the ground up on the land the home will occupy. These homes are also called site-built, conventionally framed, or traditional new-build homes. The term “stick-built” likely emerged due to homes being built on land “stick by stick.
The benefits of traditionally built homes include a wide range of customization options, allowing you to tailor everything from the layout to the finishes to suit your specific needs and preferences. These homes can also incorporate the latest energy-efficient technologies; insulation, high-performance windows, and energy-saving HVAC systems can lower utility costs and reduce your environmental footprint.
These homes tend to increase in value more than modular homes due to the ability to customize the home with premium materials. You can also monitor the construction process in real time, allowing you to make adjustments as needed. This approach often supports local construction companies, contributing to your community’s economy and ensuring your home reflects the craftsmanship of trusted professionals.
What is a Modular Home?
Modular homes surged in popularity following World War II. Unlike a site-built home, large portions of a modular home are manufactured offsite and then transported to the site where they will be constructed. They are also known as factory-built, prefab, or system-built homes. Today, approximately 3% of new construction are non-site builds, including modular homes.
The benefits of modular homes include quicker construction, as much of the building process occurs off-site in controlled environments, reducing delays caused by weather or labor shortages. They can offer significant cost savings compared to traditional stick-built homes, thanks to streamlined production methods, reduced material waste, and lower labor costs.
Traditional New Home Construction & Modular Home Financing
Whether you’re building a new home from the ground up on-site or having your home built off-site, you’ll typically be able to choose between two loan options. The first is known as a construction-to-permanent loan. This type of loan can cover both the cost of the land and the cost of constructing your home. Once the house is finished, you can convert to an adjustable, fixed, VA, FHA, or jumbo mortgage.
You also have the option of choosing a construction-only loan if you own the land outright or if you have other financing for the land.
Most, but not all, banks and lenders offer an equally wide range of loan options for financing a modular home. If you’re buying an existing modular home, options include conventional, FHA Loans, VA, and Jumbo loans. If you’re building your own, you’ll need a construction loan, just as you would with a stick-built home.
Loans for the Construction of Traditional Homes and Modular Homes in Oregon
Strategic Mortgage Solutions is a leading Oregon Mortgage Company based in Eugene, OR. We offer many loan options for existing homes and new construction. To learn more about loans that may best meet your needs as a potential homebuyer, contact our experienced team at Strategic Mortgage Solutions today by calling 541-275-1148.
